>> If "risk" equals "paying the contracted charges", (which I am sure it certainly does in this context), then most assuredly 'risk' (costs) ARE transferred!
The "risk" component is not about paying contracted charges. It is about paying inordinately high charges as a result of a catastrophic incident.
>> And the costs are an UNKNOWN! (No one, no 'entity', knows exactly how many folks will seek medical treatment, or for what conditions, in any given year. So there is 'risk' insofar as the final tab is not known.)
Well, the truth is that actuaries have a reasonable idea of what their outlays would be were it not for changes in the cost of procedures. So, they know how many Total Knee Replacements they'll be called upon to pay for; they just don't know those will cost three years down the road.
The big problem here isn't, and never was, about how insurance works. It is about government intervention which caused insurance premiums to be unpredictably high. The first mistake was when insurance began being used as employee compensation, which is a problem created by government price controls during WWII. Employers couldn't pay people more, so they said, "How about we buy you a medical insurance policy?" No one needed it, but because markets couldn't compete for employees based on hourly rates (due to price controls), it was the second best option. Then, it was made tax free, and soon, no one gave shit what it cost to go to the doctor because they weren't paying for it. And they obviously wanted all the labwork and best specialists, because the price was right.
Then, in July, 1965 the government price controlled half of the health care market, which meant that costs were shifted to private insurance plans. So, instead of a 4% inflationary spiral you got an 8% one. |
